US imposes restrictions on technology investment in China

US President Joe Biden has issued an executive order that will ban certain US investments in national security technology products in China and require the reporting of certain investment transactions. In a statement, the US Treasury Department announced that US President Joe Biden issued the Executive Order to address the national security threat to the United States from relevant countries attempting to develop and utilize products with sensitive or advanced technologies that are critical to military, intelligence, surveillance, or cyber-enabled capabilities. The statement emphasized that the administration is committed to keeping America safe and defending the country's national security by protecting technologies that are critical to next-generation military innovations, and that cross-border investment flows have long contributed to the economic vitality of the US. The statement stated that the executive order includes narrowly targeted actions to protect the US's national security while maintaining its commitment to open investment, and emphasized that the executive order will provide for the creation of a new and targeted national security program to be implemented and managed by the US Treasury Department in consultation with other agencies, including the Department of Commerce. In this context, it was reported that the program will require US persons to report certain transactions to the Treasury and will prohibit US persons from undertaking certain other transactions involving companies that engage in activities related to narrow subsets of the three advanced technology areas defined in the Decree. The statement indicated that China was defined as a relevant country in the annex of the decree, indicating that China has benefited from US investments to advance its ability to produce a number of sensitive technologies. It was noted in the statement that the US has already banned or restricted the export of many technologies and products considered for the new program to China, and that the program will prevent US investments from helping to accelerate the localization of these technologies in China. The statement listed the three advanced technology areas defined in the decree as semiconductors and microelectronics, quantum information technologies, and certain artificial intelligence systems.